JAKARTA: The project of eco-friendly cars may be put into the list of new industries deserving tax holiday, as the government is considering a set of regulation to accommodate the industry.One incentive proposed for the green car project is the possibility of delayed payment of tax during certain period, since the project is considered to give big contribution to economy, said Deputy Minister of Industry Edy Putra Irawadi.However, the tax holiday for ecocar remains a proposal since there are still terminology issues regarding the government rule, which states that industries benefiting tax holiday are new specific industries that give good implication to economy, he said when attending Indonesia International Motor Show (IIMS) 2011 over the weekend.In addition to tax holiday, as Edy added, the technical team is finalizing another package of fiscal policy that will become an incentive for development of low cost ecocar.The policy will include adjustments in income tax, import value added tax and luxury tax.Moreover, the tax will be based on car engine capacity and the import duty of components, which are not available in Indonesia.The government at the same time prepares other facilities and incentives for ecocar investment so the project is worth to develop.It is possible to include ecocar project in the list of new industries deserving tax holiday. However, the decision on fiscal facility needs to be discussed by ministers from various fields.In the meantime, the regulation on ecocar specification has been in the finalization step with the option of engine capacity at 1,000 cc or 1,200 cc, said Director General of High-Technology Industry at Ministry of Industry Budi Darmadi.Attracting investmentThe ecocar project deserves tax facility since the environmentally friendly cars are designed based on demands from the government, said PT Indomobil Sukses Internasional Tbk Commissioner Gunadi Sindhuwinata.Moreover, ecocar will attract new investment, which is separated from general car production, in the development of new plants and research for affordable cars.Minister of Industry M.S. Hidayat admitted that the price of ecocars, including hybrid cars, is 40% higher than ordinary cars. On the other hand, Indonesia needs low cost cars.So the government will seriously give many facilities, including tax allowance for ecocar so the price will be affordable, within the range of IDR70 million and IDR80 million per unit. Such vehicle will be a new trend not only in Indonesia but also in the world, he said.Gunadi also thought that ecocar must be cheaper so investment in car companies will come. Import duty is borne by the government. Tax holiday, tax allowance are needed to support ecocar. Investment in components is a must because of high demands, which is above 90%, he said. (Yusuf Waluyo Jati)(t04/msw)

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